All Forum Posts by: Rodney Marcantel

Any property close to airports or other noisy areas where you can't control the noise. Location, location, location. Other type homes, severe foundation or termite/mold issues. If it costs $10,000 to fix one thing that you can't see when you finish the rehab, then move on.

Depends on the foundation, plumbing, electrical and roof. Conditions on those will help determine if the house should be torn down or completely gutted and rehabbed. Also, look at walls and see if the wood behind the walls are in bad shape too. My 2 cents.

• Borrow from family/friend/coworker with 7 - 10% annualized return on their money.
• HELOC will take some time to get but is an option if credit is good and debt to income ratio is low.
• HML is an option but you'll pay 10 - 15% interest monthly probably.
• CC is risky in that you'll have a difficult time paying off before you rehab and sell and that could eat heavily into profits unless you have a buyer lined up already.

Thanks. Actually I use http://www.houseflippingspreadsheet.com.

I've not locked in any property yet. Looking at several. But before making offers , I want to have funds secured.

No I'm not. Just weighing my options.

Mortgage on $240K at 75% LTV would be about $800 monthly PI and would net us $180K

If we eliminate 1 car payment and the furniture, that would net us paying $200 monthly more than if we kept those items under payment terms. But we would have about $162K left over for investing in RE.

Remember, our Annuity annual payment covers the taxes and insurance on both our primary and rental properties.

So let's say I find a home for $80K needing about $20K in updates to get to an ARV of $130K - $140K. Carrying costs would be on about $200 per month plus utilities, insurance and other minor costs which the balance (162K - 80K - 20K ) would cover between buy and sell times. This limits me on the homes I can get under contract but it's a good start.

If there are other things you would consider doing with the $180K (i.e. leverage), I would love to hear from the BP family on those options.

@Richard C. sorry if you think I'm being defensive. Not my intent. Just pissed that the bank is being a pain considering we have less debt than over 80% of Americans and assets of 1.65 Mil which is more than 5% of Americans (rough estimates). I appreciate the input.

I may go back to my local bank (Frost Bank) who we've done business with for 30+ years and know the bank president personally. They are offering 50% LTV on our primary residence for a HELOC but their cost is higher ($750 for appraisal and closing costs).

If that doesn't work, then I'll look at the Credit Unions. But I think with them, you have to have an account in place?

6 months on rental = $400 x 6 = $2400 + 2 months on primary residence = $0 x 2 = $0

Total =$2400 in reserves. No problem.

Between all assets and retirement funds, we have a net worth of $1.65 Mil.

First. Vacancy isn't an issue. This is a care home and operated by a company for elderly where my father-in-law resides.

Second. We are getting a 9.5% return on investment at this point. Purchased for $211,200 plus $17,500 in updates.

Third. The bank hasn't requested income statements yet so they rejected based on credit rating and negative things on our credit from the past which have been removed as well as debt obligation on my wife's credit (cars, furniture). That's where my issue is with the bank because they haven't asked for income statements before rejecting us.

I'm looking at other companies as well and we'll see.

We have a 2 year lease in place for $2,000 monthly and our expenses are $400 monthly (hence $1,600 net income). Expenses are taxes, home owners insurance, home warranty and landscape.

Haven't used credit cards for 6 years or had a mortgage for 2 years. Car has been paid off for 5 years. That ended up shooting my credit rating down. Had one mortgage payment late in 21 years from my previous home. Some bad debt from 10 years ago that is now removed thanks to a law firm I'm paying to fix my credit. All of that is why I was turned down. It's up now to over 700 thanks to the law firm and getting 1 credit card.

Wife's credit is better (a bit ) but she has a higher debt to income ratio due to 2 car payments and furniture.

We get $15K annually from an annuity that we use to pay all the taxes on our homes and our rental which leaves us about $2,500 left over each year. We are self employed and earned about $40K net in 2013. Also get income from my father-in-law's investments (wife is POA) to cover his expenses (alheimer's) which net's us about $3K monthly and rent on rental property of $1,600 after expenses. Total income: $8,900 monthly (gross). Expenses about $5,000

So why would we be turned down by one bank for a HELOC on our residence (valued at $475K with no mortgage), I don't know but will find out tomorrow.